Sanofi sponsors the Managed Care Digest Series. I was looking at some of their data last night, and I thought I’d share two sample reports looking at diabetes retail pharmacy claims. A few things that this quick use of the tool shows you are:

Looking at the Brand and Generic mix of diabetes drugs based on payer, I notice 3 things:

No significant geographic variance based on looking at a few regions

People who pay cash are much more likely to choose generics while those with limited difference in copays (Medicaid) are more likely to choose brands

Not a significant difference between Medicare and Commercial

In another view of the data, I looked at the brand and generic mix by age. Interestingly, it shows differences by geography especially in the younger ages. It also shows a clear correlation of age and generic utilization.

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Here’s a slide presentation from the Text4Baby team that they presented yesterday. This has been one of the biggest SMS programs in the country and has gotten a lot of press. They did a survey of people about their plans to get flu shots and also share some other data and plans.

I was reading the IDC Health Insights newsletter this morning where they had an article by Dr. Alan S. Louie on personalized medicine. While this was a hot topic in the PBM world 12-18 months ago, I’ve heard much less about it lately. I thought it made sense to share one paragraph from his article here. I hope that his predictions for delivery of this evidence-based approach to care come true and can be delivered in a cost-effective way to consumers with physician buy-in and understanding about how and when to use this information.

“I believe that the FDA is likely to be significantly marginalized as a major player in the transformation to a more personalized care scenario. While still rigorous in their role as gatekeeper to ensure that drugs are safe and effective, the ability to apply growing genomics, EMR, and CDSS data and knowledge to routine medical treatment is likely to be executed outside of FDA purview. If the FDA decides to lay down the heavy hand and demand that all testing be FDA approved, then all bets are off and medical innovation will be delayed by at least 10 years or more. With payers, clinical laboratories, and others (e.g., PBMs) all buying genomics testing capabilities, it becomes increasingly possible to deliver the latest genomics insights to the point of care and amortized over large patient populations, recognizing that what are probabilities for the individual become real outcomes for portions of patient populations. Net improvements in patient outcomes become real and avoidances of treatment with little or no likelihood of success reduce both wasted efforts and unnecessary adverse drug exposure.”

While on the surface this seems like a natural opportunity for synergies, I’m not sure I really see this happening or simply wishful thinking by those in both businesses (see article about this). Since it’s not possible to track the same consumer as they move from one group to another within a PBM for historical data (i.e., when I change employers but stay with the same PBM), I can’t imagine aligning consumer profiles across divisions like Worker’s Compensation and Health Insurance.

And, while the market may be changing, there are real differences such as:

Management objectives (get back to work and off the drug)

Plan design (no copays, different formulary)

Processing (different BIN at POS)

Eligibility (there is no “eligibility” file until an incident happens to create a claimant)

In Worker’s Compensation, you also have an adjuster to deal with who is in the middle of the process and different legal frameworks to operate.

On the flipside, I agree that applying some of the processes that have worked in the traditional PBM business to WC has value it’s going to be very different. As the consumer, why do I want to use the generic when I don’t pay anything? There should also be some clinical value in coordinating the data, but the question exists of whether the consumer can be viewed with the same member ID in the adjudication platforms.

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I remember when my relative first started to show signs of having Alzheimer’s. It was 1996, and I was visiting them while I was interviewing for a job. I hadn’t been around a lot of people with Alzheimer’s at the time, and I remember calling my parents to discuss what I thought was strange behavior for someone who was relatively young (late 50’s).

Since then, I’ve known several other people with Alzheimer’s. This year, I drove my relative home from Thanksgiving dinner, and it was the first time that I’d heard her discuss Alzheimer’s with me. I know there are a lot of caregivers out there who deal with this everyday, but it gave me a brief appreciation for the challenge.

She’s on a pretty short loop where she would ask me about where she was (my parent’s house), where they live, where I live, and whether I have any kids (who are in the car). This cycle repeats every three minutes for about 40 minutes. On the one hand, I’m amazed that she hasn’t gotten too bad after 16 years with the disease. I’m also amazed that she always recognizes me. I was initially afraid that she would panic halfway through the ride and not know who I was.

On the flipside, while you can have a brief conversation, you know that it will repeat itself shortly. I guess I always hoped that as the disease progressed that the patient would be oblivious to it. Then, she started talking about her disease and how she’s prayed to God for years to take her before the condition got any worse. That was hard to hear. It’s sad to hear someone talk like that, but I know her quality of life has to be much different than it once was.

It made me appreciate the day-to-day challenges of caring fulltime for someone with Alzeimer’s and the need for us to find a cure or even a way to prevent or slow the disease.

Additionally, after visiting the Alzheimer’s Association website, I thought I’d share a few of their facts:

Today, 5.4 million Americans are living with Alzheimer’s disease – 5.2 million aged 65 and over; 200,000 with younger-onset Alzheimer’s. By 2050, as many as 16 million Americans will have the disease.

Two-thirds of those with the disease – 3.4 million – are women.

Of Americans aged 65 and over, 1 in 8 has Alzheimer’s, and nearly half of people aged 85 and older have the disease.

Another American develops Alzheimer’s disease every 69 seconds. In 2050, an American will develop the disease every 33 seconds.

Most people survive an average of four to eight years after an Alzheimer’s diagnosis, but some live as long as 20 years with the disease.

PAMTM is the Patient Activation Measure which was developed by Dr. Hibbard, Dr. Bill Mahoney, and colleagues. It helps you gauge how much people feel in charge of their healthcare. To find out more, you can go to InsigniaHealth’s website.

Given the focus on health engagement across the industry these days, I think this is an important tool to consider. It’s been used broadly and has been validated in a lot of published studies. The questions lead people to be assigned to one of four different activation levels.

You can collect and use the PAM score for segmentation, developing customized messaging, measuring program success, and/or identifying at risk populations.

A few other interesting points from one of their FAQ documents were:

Patients who are more activated are more likely to adopt positive behaviors regardless of plan design.

People with higher activation levels are more likely to choose consumer directed plans.

People with low activation often feel overwhelmed with the task of taking care of themselves.

You increase the level of success in by breaking down change into smaller steps where the consumer has a greater likelihood of success.

I was looking at some data from earlier this year (Q1 – 2011) from the AIS quarterly survey of PBMs. I thought this was a nice summary of mail order penetration by PBM. As you can see, it identifies some areas of opportunity:

Will Express Scripts’ mail penetration go up with the potential acquisition of Medco? Or, will Medco’s go down?

HPV (human Papillomavirus) infects 6M people a year. Based on a chart from USA Today on 10/26/11, the annual cases of HPV-related cancers are:

12,200 Cervical

7,100 Throat / Tongue / Tonsil

4,200 Anal

1,500 Vulvar

500 Vaginal

400 Penile

About a month ago, a federal advisory panel recommended that all 11-12 year old girls AND boys should be routinely vaccinated against HPV. This requires 3 shots which cost about $100-$130 each.

Based on data from the article, only 44% of girls have received the first shot and only 27% have received all three shots. Only 1.5% of boys have historically been vaccinated according to the CDC.

You can find out more on the Kaiser site about HPV. This is an educational issue, a compliance issue, and ultimately there is a need to get people who start the vaccination process to finish the process.

If I’m the authorized generic, how do I feel? I thought I had a deal by which I was bringing a drug to market and making some money during the exclusivity period. Will this change the way that authorized generic deals get structured?

If I’m the generic manufacturer that has the 180-day exclusivity, how do I feel? I’ve just lost a lot of my opportunity. Will this change the economics of generic manufacturers? I believe most of their profit is made during the exclusivity period.

Will other brand manufacturers follow suit on other patent expirations?

How does this affect retailers who make more money on the generics and won’t see the increased rebate dollars?

For PBM clients that get rebate dollars shared with them, these deals with Pfizer are probably a win (i.e., lower cost). What about those clients that don’t? How are they being made whole? What about clients of clients (i.e., employers who contract with a TPA or MCO who gets the rebates but doesn’t share them)?

How hard does it become to transition patients off Lipitor when Pfizer stops offering the increased rebates or lower cost?

This could be a game changing moment in the industry. We’ve seen lots of shifts, and I would add this as a new phase in the industry.

1.0 = Traditional focus on MDs and heavy use of people to detail physicians.

2.0 = Shift to DTC advertising still supported with detail reps.

3.0 = Increased power of PBMs and focus on rebating and formulary positioning.

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About a year ago, I picked up a “book” at an Aetna booth at a conference. I’d shown the technology to a few clients, but I’d never had a physical example. I thought I would share it here. When you open it up, it has a video embedded into the book. The video has several different options for messaging that you can view by pressing the buttons.

The cool aspect of the book is that it can be linked up to a computer so the videos can be updated over time. It’s produced by a company called Americhip who calls it “Video in Print”.

I’m sure it’s more expensive than a typical direct mail piece, but it can be used and updated over time. My thought is that this is a great tool for specialty pharmacy. These are high cost patients. Imagine a book with the following videos that came with their first script:

Understanding your disease

What to expect from your medicine

How to access support

Refilling your medication

The importance of adherence

The content of these videos could change over time as their condition evolves, as they change medications, or even based on different lab values.

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Yesterday, Congressman John Sarbanes (D-MD) asked the FTC to take action against Pfizer based on the deals they are signing with PBMs that will prevent consumers from accessing generic versions of the cholesterol drug Lipitor. (see Pharmalot story on this)

“This is a sweet deal for the drug companies at the great expense of consumers, employers and taxpayers,” said Congressman Sarbanes. “At a time when we should be doing more to slow the rising costs of prescription drugs, these types of practices should be prohibited. “

Assuming that this is about savings to the consumer which I think is what the FTC is focused on, I think he missed the point of the deals. Pfizer is rebating the drug to cost less than the generic which is then prompting PBMs (and payers) to treat brand Lipitor as a generic. The consumer would pay their generic copay (from what I’ve seen), and they can still go get Lipitor for less then their copay by using the copay card that Pfizer offers making brand Lipitor $4 a month.

This is a brilliant deal by Pfizer to extend the life of the drug (although I’d be upset if I was the authorized generic). The only potential people losing in this are payers who might not see the impact of the rebate dollars (e.g., carve-in employers). Most PBMs are sharing the majority of their rebate dollars these days. The question is how those rebate dollars flow down from there.

According to the 15th Annual NBGH/Towers Watson Health Survey, employees’ poor health habits are the number one issue for maintaining affordable benefits. Since studies have shown that 50-to-70 percent of healthcare costs are attributed to consumer choices and adherence is one of those issues, the topic of how to engage consumers isn’t going away.

The challenge is getting the healthcare industry to use analytics and technology tools when engaging the consumer in a way that works for each individual and builds on their proven success in other industries. Healthcare has an enormous amount of consumer data ranging from demographics to claims and behavior data. Consequently, there is great opportunity to use this data to engage consumers in their health to improve clinical outcomes. While on the one hand, it’s like motivating consumers to buy a good, the reality is that healthcare is both personal and local which complicates the standard segmentation models.

This is a dynamic time where people are experimenting with different strategies for engagement. For instance, in medication adherence, people are trying everything from teaming those who have chronic conditions with community pharmacists to make sure they are taking their medications correctly to technology that monitors when the pill actually enters your body. But, there are still fundamental gaps in the process which can be addressed using interactive technology to complement the pharmacist interventions.

Consumer engagement in healthcare is increasingly moving to new channels with 59 percent of adults in the U.S. looking for health information online and 9 percent using mobile health applications according to Pew Research Center. Additionally, there is more and more participation in social media or peer-to-peer healthcare applications. Modes like SMS, which companies are starting to leverage in programs like Text4Baby or the diabetes reminder program recently launched by Aetna, are gaining popularity. Companies like Walgreens have also begun exploring the use of SMS and Quick Response (QR) codes for medication refills.

At the end of the day, consumers want preference-based marketing where they can elect how to best engage them, but that doesn’t mean that’s the most likely channel to get them to take action.They want you to learn from their past responses to improve your future outreach, but they are also skeptic about how their data is used. You have to put yourself in their shoes to create the optimal consumer experience. You have to deliver the right message to the right consumer at the right time using the right sequence and combination of channels.This is not easy.

So, if you’re going to optimize your resources and build the best consumer experience, you need an approach which is dynamic and personalizes each experience. For example, we found that creating the right sequence and timing around direct mail and automated calls improved results by as much as 100 percent in a pharmacy program. Or, in another case, at Silverlink Communications, we found that using a male voice in an automated call to Latinos got an 89 percent better engagement rate around colonoscopies. We also know that using a peer pressure message does not work in motivating seniors to take action in both a retail-to-mail program and a cancer screening program, but does work for those younger than 55-years-old?

You have to make simple messaging relevant to them—why should I get a vaccination, why is medication adherence important, how can you address my barriers? Only an ongoing test and learn approach to consumer insights will suffice, and those that figure this out will become critical in the ongoing fight for mindshare and trust. But, this isn’t a stand-alone opportunity. We have to partner with providers to improve engagement, adherence, and ultimately outcomes in different forms. We have to offer them a platform for engagement that is built upon consumer insights and provides a unique consumer experience to them based on their disease, their demographic attributes, and their plan design. All of these factor into their behavior and are important in “nudging” them towards healthcare engagement and ultimately, better health.

If you don’t know it yet, the consumer “experience” is rapidly becoming the hot topic. I’ve talked about it a lot beginning with companies like Cigna that have hired and staffed a consumer experience team and Chief Experience Officer. But, as the WSJ pointed out earlier this week in their article “A Financial Incentive For A Better Bedside Manner“, this is getting quantified in the provider world. One might argue that experience has always mattered more in the provider world since it’s easier to switch hospitals or physicians than insurance companies, but that is likely to continue to change as the individual insurance world and Medicare continue to create competition for the individual.

For payers, you can already see this individual market playing out with the growth of retail stores which is where the experience begins. In other cases, the PBMs and payers have to rely on many cases on their call centers as the front-end of the consumer experience. Additionally, with pharmacy being the most used benefit, this is another critical area. And, we know that pharmacy satisfaction is highly correlated with overall payer satisfaction.

But, let me pull a few things that caught my attention in the WSJ article:

The survey is a 27-question survey sent to a random sample of discharged patients (about 25% of the 36M patients admitted in 2010 with a pretty low response rate of 7%). It asks about cleanliness, quiet, communications, and an overall satisfaction based on something similar to the Net Promoter Score (i.e., would you recommend the hospital to friends and family).

67% of patients give their hospitals the top two ratings on a scale of 1-10 (which I actually think is pretty good).

Only 60% say that doctors and nurses always communicated well about medications (which was higher than I expected).

Cleveland Clinic Chief Executive Delos “Toby” Cosgrove, a heart surgeon by training, says he had an epiphany several years ago at a Harvard Business School seminar, where a young woman raised her hand and told him that despite the clinic’s stellar medical reputation, her grandfather had chosen to go elsewhere for surgery because “we heard you don’t have empathy.”

The Cleveland Clinic calls their program HEART—for hear the concern, empathize, apologize, respond and thank. They also use the term “Code Lavender” for patients or family members who need immediate comfort.

I look forward to watching how this transforms over time. I know I’ve seen this play out in the dentist’s offices for my kids. The waiting rooms have video games and other things to keep them and their siblings busy, but I do agree with the article that this may unfairly bias the wealthier hospitals.

At Silverlink, we had a great opportunity to work with one of our clients and publicize it. This morning, Aetna released a joint press release with us about our hypertension program.

As companies continue to look at new ways to use technology to engage patients around chronic diseases, solutions like this offer companies a unique way to blend multiple channels into an overall consumer experience that improves engagement and outcomes.

From the press release:

The program also achieved high levels of engagement, with nearly 60 percent of participants continuing to actively monitor their blood pressure by using a free blood pressure monitor and submitting readings on a monthly basis. The frequency of participants’ cholesterol (low-density lipoprotein (LDL) cholesterol) screening also improved 5 percent.

“By helping our Medicare members manage their high blood pressure, we are hoping to help prevent heart disease, strokes and even deaths,” says Randall Krakauer, MD, FACP, FACR, Aetna’s national Medicare medical director. “Our nurse case managers work closely with our members and do a tremendous job providing them with the information, tools and support they need to help them control and improve various chronic conditions, including hypertension. The results of our program with Silverlink demonstrate that an automated program can further support and engage members in managing their own health conditions.”

As we’ve seen over the past few years, branded drug prices continue to go up YOY (year-over-year). So far in 2011, based on analysis by Barclay’s Capital, the prices have gone up 7.2%. You can see that this is the highest it’s been.

Given that brand drugs are typically only 20-30% of the oral solid market, this effect is dampened by the generic prices which typically go down. At the same time, this can have a major impact on specialty drugs which are estimated to become about 40% of your spend by 2015.

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I’ve talked before about some of the mobile PBM efforts, but what about the retail pharmacies. You should expect that the chains will have different mobile strategies than the grocery stores or the big box retailers. And, it will be interesting to see how the independents might collaborate on a shared platform.

So what should or could pharmacies offer consumers in terms of mobile applications:
– A refill application is a minimum
– Education or drug information is another basic
– There are certainly some geographic options such as a store locator or clinic locator
– There are options for location based check-in using Foursquare
– Scheduling MTM consultations or vaccinations are a reasonable option
– What about promoting saving thru 90-day retail or generics?
– As retail pharmacies are in the specialty business, there could be opportunities to promote this channel and offer support.
– Telemonitoring is another option (e.g., FaceTime)
– Use of QR code is another part as is augmenting the shopping experience with augmented reality
– Of course, couponing will be part of the solution, but what I’d like is someone who would download my shopping receipts (from multiple companies) and provide me with relevant savings.
– Should it include Rx coupons? Unlike the PBMs, retailers want traffic and if coupons increase adherence then why not.
– There are other options like photos and integration with social networks and tools.

I think one of the key “killer apps” is secure rules based messaging. Imagine using data to identify when you need a vaccination or identifying a potential drug-food issue or having age based triggers. These could be sent directly to the consumer in a secure environment. Of course, we’re only at about 10% adoption and the key question is whether these are the key consumer that everyone wants to attract. Are they the high utilizers? Do they buy other goods?

I’m sure some people will disagree about including alcohol or smoking on here (or maybe even medical marijuana), but I think this provides some interesting statistics especially around the abuse of prescription drugs which is an ongoing problem.

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PBMI puts this out each year with funding support from Takeda. It is another one of those great annual reports full of lots of trend data for you to digest. Let me pull out a few of the things that stood out to me, but I recommend you read the entire thing yourself:

I’m always interested in the overall use of programs by plans which is summarized here. Interestingly, there were three areas which carve-in did much less than carve-out – outbound phone calls, retro DUR, and therapeutic substitution.

They also include a summary of several research studies on adherence with a quote from me:

“In working with healthcare companies around adherence, our focus is always on how to best use data and technology to personalize interventions in a scalable way,” said George Van Antwerp, 2011-2012 Prescription Drug Benefit Cost and Plan Design Report Advisory Board member. “Medication adherence is a multi-faceted issue. While there is no silver bullet, technology can help deliver different messages to consumers based on the complexity of their condition, specific medications, and their plan design (for example). But, while technology can provide the initial nudge, the care team has to work together to address health literacy and build an understanding of the condition, the medication, and value of adherence.”

Another data point that I often use from here is the average number of Rxs PMPM:

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We’re in the Medicare open enrollment period right now. This is a highly competitive time for MA and PDP plans to compete for new members and to get members to switch to their plans. I’ve talked about the Star Ratings process before. I’ve talked a little about the limited network offerings before.

I recently heard one of the key CEOs in the PBM industry say that his crystal ball for 2012 was fuzzy, and he wasn’t sure what was going to happen. (Not particularly reassuring.) That being said…it’s an exciting time, and I’m going to take my pass at predictions anyways.

The proposed Express Scripts acquisition of Medco will take place although they will be required to sell off some specialty assets. This will create a new specialty player and will also trigger further consolidation and acquisitions. You will also see many of the Medco people go to new healthcare companies throughout the industry to drive change.

The contract dispute between Express Scripts and Walgreens will get resolved shortly after 1/1/12, but it will serve as the trigger for limited networks as multiple clients will keep Walgreens out of the network since they’ve addressed most of the disruption and achieved savings. But, you will also see several companies quickly add Walgreens back into their network.

Star Ratings will trigger a bigger focus on adherence across the industry and begin to create outcomes-based performance measures that the commercial business starts to see in their PBM contracts linking payment to performance.

Lipitor will be a disruptive item throughout the year with aggressive Pfizer rebating, the overhang from it potentially going OTC, and the pricing of the initial generic.

Innovation will finally begin to shift to the specialty space with this being the primary area of concern from a trend management and clinical perspective. Clients will expect innovative ways of engaging patients and improving outcomes which will push closer links between pharma and PBMs around key drugs and complex conditions. The focus on specialty spend in medical will continue, but the increasing percentage of infusion drugs will challenge this and push specialty to look for more ways of engaging with the physician.

The “retailing of healthcare” through storefronts will manifest itself in different ways in pharmacy with greater focus on specialty at retail, pharmacists as part of the ACO/PCMH concept, MTM, and ultimately through exchange based partnerships with large payers.

Integration of medical, pharmacy, and lab data will be a huge focus on PBMs create targeting algorithms and databases for segmentation, targeting, and ultimately engaging consumers around specific health behaviors.

Telemedicine in the form of telemonitoring will link into the retail pharmacy clinic strategy as they extend their pharmacy relationship from an event based relationship to an ongoing monitoring relationship around key conditions like diabetes.

Two things that I expect to continue to be areas of focus will be the development and execution of a mobile strategy and continued exploration in the area of personalized medicine and genomics.

The one outlier which I’m not sure of yet is Medicaid pharmacy. It’s been a hot topic lately, but I’m still unsure of whether that will radically change in 2012 or not.

[Interested in sharing your opinions on 2012 in a formal way? I’m going to reach out to several companies and ask their thought leaders or executives to do an “interview” with me about their predictions for 2012. Let me know if you’d like to participate.]

[And, don’t forget that you can sign up to have these posts e-mailed to you whenever I write them by signing up for my e-mail list on the right side of the blog. Thanks for reading.]

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I’ve been waiting for a while for someone to invent a “bag” or something that I can put my used exercise clothes in while I’m traveling. Sometimes after a few days on the road, these can be a stinky addition to my suitcase. There must be some bag with a chemical in them that would dry them out and absorb the smell.

But, in the interim, I was intrigued to see that Fairmont Hotels and Resorts is offering their guest workout apparel and shoes. What a great opportunity for Adidas and whoever else they partner with to let consumers test drive their clothes and shoes. You pay a small fee to use them (unless your a top frequent travel with them) and you can buy them after that if you want.

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Tiny Tower is a simple yet addictive game you can play on your iPhone or iPad. My kids figured out the other day that you could re-name the floors. For example, one of the floors is a pharmacy.

So, instead of saying “pharmacy” this could say Walgreens or CVS or Express Scripts. What a missed opportunity. I’ve talked about this before, but I think the pharmacy industry in general has missed integrating themselves into Hollywood and gaming. When’s the last movie or TV show you saw where the primary actor was a pharmacist or worked at a PBM or even worked at a health insurance company (and was shown in a positive light)?

Here’s an easy branding opportunity. It also seems like an easy revenue source for the Tiny Tower founders. Why not have companies pay them to brand these? Why not have people playing the game earn points to buy up from McDonalds to Red Robin?

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I was digging through some adherence materials, and I stopped on the NEHI graphic from their report “Thinking Outside The Pillbox” which first quantified the impact of non-adherence at $290B (a number which everyone uses now).

I don’t remember every posting it on the blog so I’m sharing it now. I think it hits on the key topics that we all talk about:

We have to get it right from the beginning with the drug regiment.

Cost can be an issue so if possible address it.

But, the biggest issues are with understanding (literacy), side effects, creating a habit, and many other things that require education and ongoing intervention and support for the patient.

[Note: NEHI has now releasesdd their roadmap on Medication Adherence which I’ll review in a subsequent post.]